7 Important Factors for Making Software Development Outsourcing Decisions

There are a lot of factors to consider when running a successful business. You must have the right people, the right timing, the right product etc. We have all heard about that. But what is the difference between a good company and a great company? In the end, it all boils down to making the […]

by Dimitar Dimitrov

May 12, 2020

6 min read

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There are a lot of factors to consider when running a successful business. You must have the right people, the right timing, the right product etc. We have all heard about that. But what is the difference between a good company and a great company? In the end, it all boils down to making the right decisions. The management choices a company makes can either ruin it or elevate it in the sky.

To grow and win the market companies today have to take a very progressive approach. Their focus must be on innovation and technology, planning, funding, making the sales and scaling up their team. When it comes to having the right team, a decision that many successful companies make is taking the outsourcing route.

We can take WhatsApp, for example. Before the app was purchased by Facebook for $19 billion, it was a small operation with five part-time employees and 30 full-time employees. Most of the work was done by developers based in Russia who helped keep costs down.

“Do what you do best, and outsource the rest.” – Peter F. Drucker

The first thing that pops into our minds when we hear the term outsourcing is that companies outsource primarily to cut costs. Sometimes that’s true. But today, it is not only a matter of cutting costs anymore. It is also about reaping the benefits of strategic outsourcing such as accessing skilled expertise, reducing overhead, flexible staffing, increasing efficiency, reducing turnaround time and eventually generating more profit. All these benefits sound good, right? Let’s dig a little deeper.

1. Costs Savings

Every company wants to have more money saved than spent, and here comes the first benefit of outsourcing that most people are familiar with – Costs Saving. You don’t have to rent an office place and hire the most expensive, while highly competent, software developers in town. You can do your research and find a great remote team of professionals who can do the job for you.

One important thing to consider here is the balance between the quality and the quantity of the services provided by the outsourcing company. You do not need to hire an army of cheap workers. If you want a quality product, hire a quality team – even if it is a smaller one.

2. Resources and Technology

Another huge benefit of outsourcing is the number of resources that are available and already prepared for you. Have you tried to hire10 senior Java developers that all have the work ethics and the agile approach to deliver high-end solutions in your home town? Not an easy job, right? With the option to outsource your work, you can find a great pre-made team which is ready to elevate your product to the next level.

Once you have found a company that matches your needs, it is a good idea to perform some interviews with the team that the outsourcing company offers you. Interviewing the people that will be building your product is even more important than getting a low price on the contract with them.

Putting in this extra effort gives you the option to discuss the tools and technologies that they have used in previous projects. As well as what processes they plan to use as a part of developing your own. Have they worked on a similar project? In essence, meet the team and get to know them and their expertise before closing the deal. Their experience and approach are crucial for the relationship that you will have with the outsourcing company, so they should be considered from the get-go.

3. Deadlines

How about deadlines? It’s great when the launching of a product or a feature is delivered exactly on time and according to the plan. Sadly this is a very rare case in most product companies. Something pops up, usually in the last minute, and a reschedule is needed. That’s one more benefit of having a remote team. Timeliness in outsourcing is as vital as the costs. When you discuss the contract, a deadline is always put in. The team is bound by the contract that they will deliver a quality product on time.

A piece of good advice here is to make all your queries beforehand. Be sure to communicate what you want and what your expectations are. Share your plan and your timeline. If the outsourcing team does not share your vision for the product, then maybe you are not a great fit. On the other hand, if the plan suits both sides, be sure that you have just added a great team to your company!

4. No need for micromanagement

Most of the outsourcing companies work on a variety of different projects. They have to deliver different functionalities for different partners. If they want to build quality projects, they have to make their teams independent. This means that the team must be equipped to operate without the need for micromanagement and supervision. It’s also a plus if the team has adopted the agile methodologies as one of their building blocks is self-sufficiency and independence.

Being self-sufficient, the outsourcing teams understand what the project is, what the value of their work is, what the business logic behind the project is and as a result, they can take care of everything. Choosing a responsible vendor who will be in charge of the projects is a must-have so that you only need to supervise the team minimally and let them take it from there.

5. Trustworthiness

A key aspect of having a great partnership is trustworthiness. Of course, it can be a difficult thing to hand over trust to an outside company. But considering all of the benefits that outsourcing provides, entrepreneurs need to understand that this approach is one of the best they can take.

Additionally, the outsourcing teams are always looking forward to building quality relationships both with their partners and their management team. In just a few weeks, you can see if the team is performing well, meeting deadlines and understands the requirements. Trustworthiness is a direct result of observing your partner company do their jobs well and efficiently. Having trust makes the workflow simple.

Outsourcing companies present themselves through their previous work a lot. Find out what kind of projects they have participated in. Do they work with corporations or start-ups or both? Have they signed a contract for every available project, or are they picky and prefer to choose only the quality ones?

Visit the vendor’s website or even go to their office. Familiarise yourself with their company culture. Check if the developers’ team is into your product and idea. If their company culture is similar to yours, then you will likely be able to bond easily.

6. Communication

How are you going to create a quality project if you and the outsourcing team barely understand each other? Hiring remote teams have a special advantage. A great remote team simply operates by communicating all the time. With partners, clients, with the Product Owner, with the Project Manager. In essence, with everyone involved in the delivery of the software. This has developed certain qualities that make communication in a project easy – as outsourcing teams are highly used to leading effective communication.

It’s crucial to find an outsourcing team that understands you and your requirements. Their communication skills need to be spot on without any room for communication barriers. If they don’t understand your demands, they won’t be able to build the system that you want.

7. Vision

Last but not least, having a partner that is self-sufficient at distributing work leaves you plenty of time to focus on the business aspect of your project.

What will make your company successful? I highly doubt that you will be able to be involved in product development, negotiations on deals as well as coding the software – all at the same time. Even if you could, the quality of your work will likely decline. So instead, focus on what you do best and find a way to outsource the rest of the work to specialists that will do the same.

In conclusion

There are some great opportunities if you choose to work with an outsourcing company. No matter if you want to add a feature in your software, build a new system or boost and improve your performance, you can always research and find great teams who will support you in your venture.

Middle Software Engineer 1 at Dreamix